Subprime credit cards rely on a completely different model of risk than prime issuers. Approval is primarily driven by behavioral scoring - rather than a credit score. Lenders typically analyze trends such as recent payment behavior, volatility in use, and the past performance of comparable subprime products. The focus is on the willingness to pay instead of normal measure of credit worthiness (strength). They will also often put their credit limits intentionally low - $300-$700 is the norm - since the issuer wants to observe the discipline of repayment prior to increasing its exposure to the borrower. Once the borrower has built time with payments, typically they issuer would review if to increase the credit limit after the borrower exhibited between six and twelve months of on time payments, low delinquency risk, and low volatility in use. Often, banks have some kind of machine learning model of comparable behavior that evaluates the behavior each month to see if or when to offer an auto CLI. Default rates in subprime are typically straight line to a large spike - often 20%+ / 30%+ depending on the portfolio - which is the reason why fees, APRs, and strict risk controls are implemented in the first place. These cards are not operative on maximizing spending but rather managing the predictable loss patterns while rebuilding credit for a consumer.
Subprime credit cards focus on those with less-than-perfect credit scores or limited credit history. The approval of a card usually depends on income, and sometimes debts owed. Credit card issuers will use automated scoring models, which may cause even small issues on a credit report to affect pre-approval. Generally, limits on subprime credit cards start low, and are typically related to both income as well as one's payment history. An individual who uses a subprime card responsibly, may qualify for an increase in the credit limit over time. Cardholders who have an unpaid balance nearly always default more often than consumers who hold prime credit cards, which is one of the reasons interest rates and fees are higher than those associated with prime cards. In the long run, regular payments and a low balance can improve credit measures and open doors to prime cards.